Virus resurgence may weigh down HK trade: analyst

The sector grew in April driven by stronger external demand.

Hong Kong’s trade sector saw strong growth in April due to improving external demand, which will likely remain unless COVID-19 resurges in other territories. 

The value of total exports and imports rose 24.4% to $384.9b and 25.2% to $416.7b, respectively in April. This growth, according to the OCBC Treasury Research, was linked to improving external demand in Asia;

“The strong trade data of April indicates that Hong Kong’s exports continued to benefit from the rebound in external demand and the vibrant trading activities in Asia,” the bank said in its weekly review.

The sector is seen to remain resilient, but this could face challenges, stemming from virus resurgence in the region, particularly in Singapore, Taiwan and Vietnam, as well as supply chain concerns.

“Moving ahead, we expect Hong Kong’s trade sector to remain resilient given China’s solid economic growth and the further revival of external demand,” the bank.

“However, we remain wary of some downside risks including the virus resurgence in some parts of Asia and the supply chain bottleneck.”

Moreover, the OCBC expects the economy to recover, once efforts to speed up vaccination in the city start showing results. This could also lead to the relaxation of COVID-19 measures in place.

The revival of the office property market, however, will still be unlikely despite the positive outlook on the economy and health restrictions.

“Until border reopening brings in pent-up demand of overseas companies or Chinese companies, significant recovery looks unlikely for the office,” the OCBC said.

This followed JLL’s report that vacancy rate in Hong Kong inched up to 9.5% by the end of April.